The National Association of Realtors reportedly wants federal antitrust regulators to block Zillow’s planned acquisition of Trulia, but there are no signs that the Federal Trade Commission plans to intervene.
Zillow and Trulia — the two biggest real estate search portals — have minimized antitrust concerns about the merger, saying there are many players in the online media industry, and that most of the money real estate brokers and agents spend on marketing hasn’t even migrated online yet.
Imaginary "Zulia" logo illustrating the concept of a merger of Zillow and Trulia. Zillow and Trulia are trademarks of their respective companies.
Citing an anonymous source, the New York Post reports that NAR wants the FTC to block the deal, on the grounds that there are essentially three big national real estate search sites — Zillow, Trulia and realtor.com — and that there should not be further consolidation.
Realtor.com — the third most popular search site — is operated by Move Inc. on behalf of NAR under the terms of an agreement dating to 1996.
NAR declined to comment on the report, or to state the 1 million-member trade group’s stance on the merger. NAR also declined to say whether it had contacted the FTC or any other government agency about the merger.
“It would not be appropriate to respond to ‘speculation’ in the marketplace, especially about our strategic business partners,” said NAR spokeswoman Sara Wiskerchen in an email, referring to NAR’s ties to realtor.com.
The FTC also declined to comment, noting the only public information about mergers during the agency’s preliminary review is an early termination list of companies that have been given the green light to close a deal before an allotted waiting period.
The FTC — which granted early termination of its review of Realogy’s recent acquisition of ZipRealty — has not added the Zillow-Trulia merger to the list.
Companies that wish to merge must wait 30 calendar days after submitting premerger notification paperwork to the FTC before closing their deal. If the review raises competition issues, the FTC may extend the review period and ask the parties to turn over more information so it can take a closer look at how the transaction will affect competition.
The FTC has until Sep. 3 to request additional information about the proposed Zillow-Trulia merger, the Post reported.
Even if antitrust regulators don’t stand in the way of a merger, they might impose conditions that would give Zillow cold feet about closing the deal, the New York Times blog DealBook has reported.
When CoreLogic acquired DataQuick Information Systems Inc. this year, it had to agree to license national assessor and recorder bulk data to RealtyTrac to settle a complaint by the Federal Trade Commission that the $661 million acquisition was likely to result in less competition.
(In that case, Zillow argued that it should be released from its long-term contract with CoreLogic so it could negotiate a better deal with RealtyTrac. The FTC rejected Zillow’s argument.)
Shortly after Zillow announced its plans to acquire Trulia, NAR leaders advised members to demand better terms from listing portals. An Inman News poll subsequently showed that the majority of readers were satisfied with their relationships with the portals.
Although Zillow and Trulia are expected to continue operating as separate websites, a merger could pave the way for the combined company to raise the rates it charges for ads and leads across a network of sites that includes Yahoo Homes, AOL Real Estate, HGTV’s FrontDoor, HotPads and MSN Real Estate.
In an email to some brokers and franchise partners, Zillow said the company expects to maintain both the Trulia and Zillow consumer brands, “both of which have large and loyal consumer followings with limited overlap.” Zillow said the merger would allow it to innovate faster and deliver greater return on investment for agents who advertise on the sites.
In another email to “certain industry partners,” Zillow promised “better coordination among brands” and “deeper partnerships and better listing infrastructure, as well as seamless, free distribution of listings across even more platforms.”